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lys-0071 [83]
3 years ago
7

You purchase one IBM July 120 put contract for a premium of $5 (per share). You hold the option until the expiration date when I

BM stock sells for $123 per share. You will realize a ______ on the investment. (Hint: Recall that each put covers 100 shares.)a. $200 profitb. $200 lossc. $300 profitd. $300 losse. $500 loss
Business
1 answer:
Art [367]3 years ago
8 0

Answer: $200 loss

Explanation:

When you purchase an option, you assume that the share price will gain a higher amount that the premium paid. In this case, it did not.

For this put option, you paid a premium of $500 ($5 * 100)

This is because there are 100 shares in each put.

The stock rises to $123 and you decide to sell at this price, you will achieve $300 increase on the shares:

(123 - 120) * 100 = 300

The shares had a gain of $300 but you paid $500, leaving you with a loss of $200 on the investment.

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Answer: D. A & C

Explanation:

A long term liability is one that is due to be paid in a period longer than a year. The loan is due in less than a year so the only way to classify it as a long term liability is to make it a loan that will extend past a year. This can be done through refinancing which is to replace the current loan with another loan.  

Karin's company therefore would need to demonstrate that the obligation can be refinanced on a long-term basis by them and they must also have the intention to do so as well.

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Which is not an example of a behavior exhibited in a market economy?
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3 years ago
Saira, Inc. has the following income statement (in millions): SAIRA, INC. Income Statement For the Year Ended December 31, 2017,
AysviL [449]

Answer:

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Jessica Cervantes is a renowned entrepreneur and business women who advises the new entrepreneurs who are just starting to enter this zone.

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Jessica Cervantes says that new entrepreneurs should have faith in themselves , and this faith and believe must reflect in their products.

She also advised to use all the resources and to reach out to the other entrepreneurs seeking help and advice.

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